Question :
21) All of the following assumed in the above analysis : 1217165
21) All of the following are assumed in the above analysis EXCEPT:
A) a constant product mix
B) fixed costs increase when activity increases
C) cost and revenue relationships are reflected accurately
D) all costs can be classified as either fixed or variable
Answer the following questions using the information below:
Franscioso Company sells several products. Information of average revenue and costs is as follows:
Selling price per unit$28.50
Variable costs per unit:
Direct material$5.25
Direct manufacturing labor$1.15
Manufacturing overhead$0.25
Selling costs$1.85
Annual fixed costs$110,000
22) The contribution margin per unit is:
A) $15
B) $20
C) $22
D) $125
23) All of the following are assumed in the above analysis EXCEPT:
A) a constant product mix
B) all costs can be classified as either fixed or variable
C) cost and revenue relationships are reflected accurately
D) per unit variable costs increase when activity increases
Answer the following questions using the information below:
Dr. Charles Hunter, MD, performs a certain outpatient procedure for $1,000. His fixed costs are $20,000, while his variable costs are $500 per procedure. Dr. Hunter currently plans to perform 200 procedures this month.
24) What is the budgeted revenue for the month assuming that Dr. Hunter plans to perform this procedure 200 times?
A) $100,000
B) $200,000
C) $300,000
D) $400,000
25) What is the budgeted operating income for the month assuming that Dr. Hunter plans to perform the procedure 200 times?
A) $200,000
B) $100,000
C) $80,000
D) $40,000
Answer the following questions using the information below:
Nancy’s Niche sells a single product. 8,000 units were sold resulting in $80,000 of sales revenue, $20,000 of variable costs, and $10,000 of fixed costs.
26) The contribution margin percentage is:
A) 12.5%
B) 25.0%
C) 37.5%
D) 75.0%
27) To achieve $100,000 in operating income, sales must total:
A) $440,000
B) $160,000
C) $130,000
D) None of these answers are correct.
28) Gross margin is:
A) sales revenue less variable costs
B) sales revenue less cost of goods sold
C) contribution margin less fixed costs
D) contribution margin less variable costs
29) In the merchandising sector:
A) only variable costs are subtracted to determine gross margin
B) fixed overhead costs are subtracted to determine gross margin
C) fixed overhead costs are subtracted to determine contribution margin
D) all operating costs are subtracted to determine contribution margin
30) In the manufacturing sector:
A) only variable costs are subtracted to determine gross margin
B) fixed overhead costs are subtracted to determine gross margin
C) fixed overhead costs are subtracted to determine contribution margin
D) all operating costs are subtracted to determine contribution margin
